Hugo Chávez is Dead!

Hugo Chávez died on March 5th after a two year battle with cancer. He had been president of Venezuela since 1999. It is great news. While the most likely outcome of a mandated election in 30 days of his death will be the election of his vice-president, Nicolás Maduro, Mr. Maduro lacks the charisma and loyal following of Chávez. The opposition has been making slow but steady electoral gains and is increasingly united. Either way, the new president will have to deal with the decaying façade of Chávez’s “21st Century Socialism”. 

Chávez made a political machine on pitting the common person of South America against the exploitation of The West, “The Oligarchy”, and especially the United States. But this is a false dichotomy. The old Dependency Theory, while a valid explanation for the poverty post-colonial countries found themselves in decades ago, has nothing to offer the future. At this point poverty in developing countries has more to do with their own governments, geography, and natural resources. 

In Venezuela, the economy is only held up by oil revenue. The money was hidden away into opaque accounts under Chávez’s control. He steadily transferred power to the presidency and politicized all institutions of government. Because of his policies, agricultural production has fallen and shortages of staples in grocery stores are common place. Violent crime and inflation have soared, though the government does not admit to its true scope. 

To be fair, Chávez stood in many relatively free elections[1], reformed the constitution democratically, and passed laws according to it. The poverty rate fell from near 50% to 30% over his rule[2]. But poverty fell across Latin America (not to mention the entire world), and greater reductions in poverty were achieved by more centrist governments in places such as Brazil and Peru. Venezuela grew faster than the average for Latin America for most of the 2000s, but this was oil fed growth. Following the reduction in world demand during the Great Recession, Venezuela remained in recession for a year longer than the rest of Latin America. 

Venezuela never quite lost its democratic tradition, and as Latin America grows, its future is still bright. The true tragedy of Chávez wasn’t his divisive politics or tired ranting. The tragedy was that the vast wealth from a one-time oil boom was squandered. Rather than ensure sustainable growth fueled by smart public investments (such as fixing the crumbling infrastructure or recent housing shortage) the oil money was used to stimulate the economy before elections and provide cover for an increasingly inefficient system for as long as possible. The money was wasted on consumption rather than invested, and it will never come back. 

1.  As his most recent opponent said the election was "free but not fair", as in people could vote for whomever they wanted, but the media and all tools of the state were used as part of Chávez's campaign.

2.  Defined as the percentage of people living on incomes insufficient to cover their basic needs